On Sunday mornings, teenagers crowd the sidewalks of Tokyo’s Shibuya district until they spill over the curbs and into the streets. They start at Hachiko Square, under a video monitor that takes up the entire face of a glass and steel high-rise, and spread out, 30 or 40 wide in the crosswalks. They mill around displays stacked with new sneakers—Nike and New Balance from the United States, Puma and Adidas from Europe via New York. They gather in a small music store that specializes in the American vinyl records played in Tokyo’s popular soul bars—Grandmaster Flash, Curtis Mayfield, Parliament. They spend 370 yen (roughly $3) at Starbucks for a tall iced latte, which tastes just as it does in Washington, D.C., and is just as overpriced. Like any global metropolis, Tokyo serves up a substantial dose of American culture, particularly to its youth. Sometimes, like Starbucks or Nikes, it is authentic. Sometimes, like a “Harbard University” sweatshirt or a potato salad pizza, it is not. But cultural accuracy is not the point. Less important than authentic American origin is the whiff of American cool.

A few blocks from the Starbucks in Hachiko Square you will find Mandarake, a shop that sells used manga and anime (Japanese comic books and animation, respectively). There is no storefront full of dog-eared comics in plastic sleeves, just a maw of an entrance carved cavelike out of fake rock and flight after flight of stairs down to the basement-level shop. There, comic books and videotapes are stacked to the ceiling, alongside the toys and collectibles they inspired. The real esoterica are under glass, rare Godzilla and Ultraman action figures selling for hundreds of dollars each.

With a network of shops across Japan and a listing on the Nikkei Stock Index, Mandarake Incorporated is positioning for global expansion. New stores opened in Los Angeles in 1999 and in Bologna in 2001. Japan accounts for the bulk of Mandarake’s revenue, said company president Masuzo Furukawa, “but in, say, about five to 10 years, it should be the other way around. The foreign market should be much bigger.”

Already, “there isn’t much of a time lag between what sells well in Japan and what sells in the United States,” Furukawa said, comparing business in Tokyo and Los Angeles. The buxom, gun-toting pixies, cute monsters, and transforming robots that fill Mandarake in Shibuya show up in MTV graphics, street fashions, bars and dance clubs, and even museums. Last year, the Getty Center in Los Angeles debuted a blockbuster show on Japan’s “Super Flat” movement—young Japanese art inspired by the two-dimensional look of commercial cartoons.

Sometimes, like an Issey Miyake gown, the Japan that travels is authentic. Sometimes, like cream cheese–and–salmon sushi, it is not. But cultural accuracy is not the point. What matters is the whiff of Japanese cool.

***

Critics often reduce the globalization of culture to either the McDonald’s phenomenon or the “world music” phenomenon. For the McDonald’s camp, globalization is the process of large American multinationals overwhelming foreign markets and getting local consumers addicted to special sauce. In this case, culture flows from American power, and American supply creates demand. For the world music camp, globalization means that fresh, marginal culture reaches consumers in the United States through increased contact with the rest of the world. Here, too, culture flows from American power, with demand from rich Americans expanding distribution for Latin pop or Irish folk songs.

But Japanese culture has transcended U.S. demand or approval. Director and actor Takeshi Kitano, arguably the Japanese film industry’s most noteworthy recent export, was first embraced in Europe, then in the United States. At this year’s Berlin Film Festival, Hayao Miyazaki’s Spirited Away became the first animation feature ever to win a top festival prize. A major publishing show in Frankfurt, for the first time, opened an exhibition of Japanese manga. Namie Amuro, reigning “J-Pop” (Japan-Pop) music diva of the 1990s, built a huge fan base in Asia without ever going on tour in the United States. Millions of teenagers in Hong Kong, Seoul, and Bangkok covet the latest fashions from Tokyo, most of which never make it to New York. Japanese lifestyle magazines, some of the most lavishly produced in the world, are smuggled by illegal distributors across Asia as soon as they are on newsstands in Tokyo, though none has launched an American edition.

At the same time, Japan has made deep inroads into American culture, usually written off by the rest of the world as aggravatingly insular. Bestselling Sony Playstation and Nintendo home video games draw heavily on Japanese anime and manga for inspiration. So have recent Hollywood films, such as The Matrix, and television series, including director James Cameron’s Dark Angel. “Tokyo is the real international capital of fashion,” the style editor of the New York Times proposed this spring, spurning Paris, New York, and Milan as pretenders. Japanese anime-style cartoons currently fill the majority of time slots in the after-school and Saturday morning schedules on U.S. cable television. The cartoon and video game franchise Pokémon—broadcast in 65 countries and translated into more than 30 languages—even made the cover of Time magazine.

In the 1980s, Japan pioneered a new kind of superpower. Tokyo had no army to speak of, no puppet regimes to prop up, and no proxy wars to mind. Just an economy. What made Japan a superpower, more than just a wealthy country, was the way its great firms staked claim to a collective intellectual high ground that left competitors, even in the United States, scrambling to reverse-engineer Japanese successes. Seeking guidance on everything from “quality circles” to “just-in-time” inventory management, U.S. corporate executives bought stacks of books on Japanese management techniques. The key to Japan’s economic ascendance was not ideology, at least not by Cold War standards; but it was a method, it drove the most dynamic economy of the era, and it was indisputably Japanese.

Fast forward to 2001. High incomes, long life expectancy, and many more of the statistics that mean anything in terms of quality of life still tilt in Japan’s favor. But the national swagger is gone, a casualty of a decade-long recession. Gross domestic product is down; the yen is down; the Nikkei Stock Index hit a 17-year low; and full employment, practically a natural right in Japan, has been replaced by near-record rates of unemployment. Tokyo has tried to keep the International Monetary Fund from investigating its banking system, which is suspected to be in even worse shape than the finance ministry has admitted. A recent downgrade from Moody’s Investors Service rates Japan only slightly more creditworthy than Botswana. The country limps its way into G-8 meetings and remains locked out of the U.N. Security Council.

Yet Japan is reinventing superpower again. Instead of collapsing beneath its political and economic misfortunes, Japan’s global cultural influence has only grown. In fact, from pop music to consumer electronics, architecture to fashion, and food to art, Japan has far greater cultural influence now than it did in the 1980s, when it was an economic superpower.

Its cultural sway is not quite like that of American culture abroad, which, even in its basest forms, tends to reflect certain common values—at the very least, American-style capitalism and individualism. Contemporary Japanese culture outside Japan can seem shallow by comparison. Or it can reflect the contradictory values of a nation in flux, a superficiality that prompted the Japanese art magazine BT to equate contemporary Japanese culture with “Super Flat” art, “devoid of perspective and devoid of hierarchy, all existing equally and simultaneously.” “We don’t have any religion,” painter Takashi Murakami told the magazine, a bit more cynically. “We just need the big power of entertainment.”

But gradually, over the course of an otherwise dismal decade, Japan has been perfecting the art of transmitting certain kinds of mass culture—a technique that has contributed mightily to U.S. hegemony around the world. If Japan sorts out its economic mess and military angst, and if younger Japanese become secure in asserting their own values and traditions, Tokyo can regain the role it briefly assumed at the turn of the 19th century, when it simultaneously sought to engage the West and to become a military and cultural power on its own terms.

***

I spent three months last year traveling around Japan, interviewing artists, directors, scientists, designers, and culture mavens. Many of them seemed surprised at the idea of Japanese cultural might abroad. They tended to think very little about foreign audiences. What they talked about instead was foreign inspiration. At times, it seems almost a strange point of pride, a kind of one-downsmanship, to argue just how little Japan there is in modern Japan. Ironically, that may be a key to the spread of Japanese cool.

“I can’t always distinguish elements of traditional Japanese culture from Japanese culture invented for tourists,” confessed Toshiya Ueno, a sociology professor at Chubu University and, in his spare time, a techno deejay with gigs in Tokyo and Amsterdam.

“During the First World War, in Japan, already there was a strong argument about overcoming modernity,” Ueno said, sitting in his cluttered university office behind two turntables and a mixing board. “Already, postmodern eclecticism was surfacing.” In other words, Japan was postmodern before postmodernism was trendy, fusing elements of other national cultures into one almost-coherent whole. It makes sense: Japan’s history is filled with examples of foreign inspiration and cultural fusion, from its kanji character system to its ramen noodles.

Consider the case of a new band, Lipless X Sister, and a new dance, the Pada Pada. Like most Japanese pop music acts, Lipless X Sister is a concept group, dreamed up by record producers and marketing executives and then assembled through auditions. In this case, the concept was 18- to 22-year-old girls with 2-year-old children. A producer explained the band’s name to local press: “You can like them. But they’re mothers, so you can’t kiss them.”

Their debut performance took place in March 2001 on a makeshift stage outside 109, a tall shiny department store in Shibuya that, for a few million of Japan’s teenage girls, is the most stylish, most important, and most exciting place in the world. The girls in the band, like every girl in every magazine that season, had light cedar tresses, denim skirts, and tight tops with vintage sports lettering (no doubt all of it was for sale inside). They wheeled their kids out in strollers, all in a line. Then they started to sing. “Pada Pada mama, Pada Pada mama.”

A new dance then sweeping through Tokyo’s clubs, the Pada Pada is “uniquely Japanese,” said Katsuo Shimizu, a culture columnist at the daily Asahi Shimbun, touting it as the first popular dance step to originate in Japan. In fact, the Pada Pada looks like nothing if not the Macarena. The dance didn’t seem uniquely Japanese. It didn’t seem at all Japanese. But then, what should one expect, geishas grooving on a Shinto arch?

The Pada Pada doesn’t require a great cultural leap for foreigners. The band has an English name, not that it makes much sense to a native speaker, but English words travel well. If the Pada Pada spreads across Asia, however, it will be on the strength of Japanese pop songs, Japanese music videos starring Japanese girls with light cedar hair, and Japanese cool. Maybe there is not much traditionally Japanese about any of it. But if that is a requirement for national branding, American pop culture is hardly more respectful of traditional Americana—unless you count when Madonna wears a cowboy hat.

***

Japan’s most visible pop icon, Sanrio’s cartoon cat Hello Kitty, takes the national ambiguity of the Pada Pada further. Kitty is not actually supposed to be Japanese. In fact, Kitty’s last name, announced for the first time in spring 2001 in Sanrio’s official fan magazine, is White.

Kitty White? Kitty is a WASP!

Hello Kitty drives an empire worth almost $1 billion in global sales per year. “From Target to McDonald’s, she went big time,” wrote Asian-American pop culture magazine Giant Robot, proclaiming her the best “Corporate Whore” of 2001. Sanrio licenses so many products with Hello Kitty’s likeness that a company spokesman could not confirm the current count. Put it between 12,000, the estimate he gave, and 15,000, a number that is widely reported. You can buy individually wrapped Hello Kitty prunes. You can buy a toaster that burns Hello Kitty’s face into a piece of bread. You can buy a Hello Kitty vibrator. “We don’t have such strict regulations,” the spokesman said. “Hard alcohol, maybe that would not be appropriate.”

Hello Kitty’s longtime designer, Yuko Yamaguchi, met me in a small Sanrio conference room, dressed in dark jeans and a baggy shirt. A cell phone and a dozen Hello Kitty dangles hung from a chain around her neck. So which is Kitty, foreign or Japanese? “When Kitty-chan was born, in those days it was very rare for Japanese people to go abroad,” she said. “So people yearned for products with English associations. There was an idea that if Kitty-chan spoke English, she would be very fashionable.”

Today, teenagers and 20-somethings in the United States and elsewhere buy Hello Kitty purses and cell phone cases as icons of Tokyo pop chic. In the 1980s, however, Sanrio’s American-based marketing team had to customize Hello Kitty for American audiences, which they considered a tough sell. Often, that meant designing two Kitties, one for Japanese and one for Americans. “Purple and pink were very strong,” Yamaguchi said, recalling Sanrio’s American market research. “Blue, yellow, and red were believed to be taboo.”

“There were also motifs that were taboo in the United States. There was a snail, one of Kitty-chan’s friends. When there is a rainstorm, Kitty-chan has an umbrella and a flower, and beside Kitty-chan is a snail. In the United States, that was not accepted, and there was a request to eliminate the snail,” she said. “Differences in color were easy, but I had difficulty accommodating all the little requests—there were so many.”

“Now, there is no difference in design. Now, we have the same Kitty-chan in both markets,” she said. They have to. Sanrio’s head of marketing for Asia, Shunji Onishi, described the company’s disastrous attempt in the 1990s to customize Hello Kitty for Taiwan and Hong Kong, two of Sanrio’s strongest markets. They put Kitty in local clothes and surroundings, and the products sat on the shelves. “They know Kitty is from Japan. That’s why they like it,” he said. “Especially the younger generation.” Even if she is actually English? “Kitty has a sort of independent existence,” Yamaguchi answered, hedging on nationality a bit. “I let her transcend the borders of London.” A regular Davos cat.

***

Hello Kitty is Western, so she will sell in Japan. She is Japanese, so she will sell in the West. It is a marketing boomerang that firms like Sanrio, Sony, and Nintendo manage effortlessly. And it is part of the genius behind Japanese cultural strength in a global era that has many countries nervous about cultural erosion.

Imagine for a moment if modern Japan were more like France, less culturally plastic and more anxious that globalization might erode its unique national character. Its cultural reach might look something like that of Japanese sumo—popular at home but stubbornly closed to foreign influence, and as a result, largely invisible outside Japan.

Tokyo’s official sumo museum, maintained by the Japanese Sumo Association, ought to be one of the city’s big foreign tourist attractions; instead, it is a dreary, one-room obscurity. The sumo association sells no official merchandise, at home or abroad. Occasionally, the association will hold an exhibition match outside Japan but only when a foreign city campaigns for a visit, and then never more than once or twice in a year. It is a marked contrast to the U.S. National Basketball Association (NBA), for instance, which in recent years has aggressively promoted its sport around the world and hinted that it might place a new team in Mexico City, or even a whole division of teams in Europe.

It is no wonder why the NBA—and the U.S. football and baseball leagues—takes a global approach. Foreign fans mean extra licensing and broadcasting revenue. And if a foreign star emerges, you have the possibility for another Ichiro. The day Japanese baseball star Ichiro Suzuki left Japan to bat leadoff for the Seattle Mariners, Japanese sports shops were already filled with official Mariners jerseys and baseball caps in anticipation. During the season, Japanese television covered every Mariners game live, despite a 12-hour time difference.

By that logic, the fact that 25 percent of the wrestlers in sumo’s top two divisions are foreign-born should be great for the sport—it raises the level of competition and offers up hometown heroes to potentially lucrative foreign broadcasting markets. But instead, it is a source of great anxiety. Sumo is a rare thing, a part of Japan’s commercial pop culture that looks much as it did hundreds of years ago.

Sumo is seldom broadcast outside Japan, but Hawaiian television carries all the tournaments. So a tall, skinny kid named Chad Rowan grew up watching Konishiki (whose given name is Salevaa Atisanoe), a fellow American from Hawaii who left the United States to become sumo’s first 600-pound wrestler. He also knew Takamiyama, another Hawaiian, the Jackie Robinson of foreign sumo wrestlers, who endured hate mail and death threats as he rose though the sumo ranks in the 1960s. Rowan never considered wrestling, himself. But he knew it was a big deal when Takamiyama, now a powerful coach, offered Rowan a chance to go to Japan with him and train. Rowan took the name Akebono and became the first foreigner the sumo association would declare a Yokuzuna, a grand champion.

When I arrived at Azumazeki Heya, the training club on the eastern edge of Tokyo where Akebono now coaches alongside his former mentor, a dozen wrestlers were waiting for their turns in the ring. Even so, you could not miss Akebono, not at 6 feet 8 inches and 512 pounds. “Osu osu osu!!” he yelled, crossing his arms and resting them on the bulge of his stomach. “Push push push!!” A larger wrestler leaned stiff-legged on a smaller one, and the smaller one pushed him from one side of the dirt ring to the other, and back, and again, and back. Sisyphus with a fleshy boulder. The smaller man gasped and collapsed to the dirt, his sweat turning it to reddish mud. “What’s wrong with your legs?” Akebono taunted in Japanese, grinning. “You can go for 30 minutes, can’t you? It’s only five or six minutes and you look exhausted!” Akebono speaks only Japanese at the heya, even with Azumazeki (the name Takamiyama took when he retired from competition, instead of his given name, Jesse Kuhaulua).

Wrestlers live at their heya, train at their heya, and eat at their heya. For a foreigner like Akebono, the instant immersion is twofold: immersion in sumo and immersion in Japan. Not everyone would face that kind of cultural rebirth for a chance at success in the most foreign of sports, and that is part of the point. “It’s not easy, man. It’s not easy,” said Azumazeki, in a Louis Armstrong rasp that has made his voice one of the most recognizable in Japan. Although he also discovered Konishiki abroad, he does the vast majority of his recruiting in Japan. “Back in Hawaii, my relatives and friends introduce us to kids,” he said. “I don’t encourage them. I prepare them for the hardship.” He explained that he is looking for more than just athleticism and a frame six meals a day can bulk up. “We try to find someone who would get along with Japan, who wants to be a Japanese kind of person.”

Heya masters like Azumazeki, like coaches in any sport, are under pressure to produce bigger and stronger athletes. At the same time, there is a strong stigma against traveling the world in search of foreign giants. If all else fails, the sumo association will enforce a seldom-mentioned quota of 40 foreign wrestlers in sumo at one time—or about 15 percent of the total. But all else has yet to fail.

***

A cultural superpower needs a healthy economic base but not necessarily a healthy economy. Perversely, recession may have boosted Japan’s national cool, discrediting Japan’s rigid social hierarchy and empowering young entrepreneurs. It may also have loosened the grip a big-business career track had over so much of Japan’s workforce, who now face fewer social stigmas for experimenting with art, music, or any number of similar, risky endeavors. “There’s a new creativeness here because there’s less money,” said Tokyo-based architect Mark Dytham, a London transplant. “Good art is appearing, young strong art. Young fashion is appearing.” Graphic designer Michael Frank, who shares a flourishing downtown studio with Dytham, agreed: “A lot of interesting smaller magazines appeared in the last four or five years. A lot of small little businesses, people running their own shops, people running their own music labels, people running their own clubs. Bigger companies are starting to pick up on those little things and support them.”

Meanwhile, a constellation of factors distinct from the economy and its woes has kept yen flowing to the pop industries and other cultural media that Japan projects around the world so effectively: demographics that favor youth and their whims, a reliable demand for luxury goods, and a reputation for cutting-edge technology.

A generation of declining birthrates has filled Tokyo with one-child families. In scarcity, there is power. Not political power, not yet anyway, but consumer power, lots of it. “[Children] sense that they are rare,” said Mariko Kuno Fujiwara, of the Hakuhodo Institute of Life and Living, a sociological think tank attached to one of Japan’s major advertising agencies. And so they tend to be spoiled. Fujiwara recalled one newspaper headline—“Our Children Kings”—with a laugh. Tokyo’s youth spend an average of $150 a month on cell phone bills alone. They propel a dizzying turnover in street fashion. They drive the second largest music industry in the world, by far the largest in Asia and one that is second only to that of the United States. At an HMV music store in Ginza one afternoon, I counted more than 100 people in line, and not one of them looked to be over 30. Japanese firms have strong financial incentives to hew to the demands of a generation with high disposable income, regardless of economic ups and downs.

Luxury goods have also fared well in Japan’s slack economy. Japanese consumers haven’t stopped buying high-end products, as a number of sociologists I spoke with stressed. They simply save up longer for them. So even as the economy languishes, rush hour in Tokyo is like a luxury car show. Louis Vuitton, which opened its Tokyo boutique in the midst of the current recession and marked up prices 50 percent over Paris shops, makes more money in Japan than anywhere else in the world. Sony electronics are also frequently more expensive in Japan than abroad, one Sony industrial designer explained, because Japanese consumers strongly prefer lighter materials and sleeker designs, even if they cost more. A sliver of a minidisc player in pumpkin orange and lime green, a narrow cell phone with a big color screen for Web browsing, a tiny MP3 personal stereo that clips directly in your ear—these are goods that inspire technolust in the levelest of heads, Japanese or foreign.

***

Last summer, the prestigious New York art gallery P.S.1 announced an exhibition called Buzz Club. “Animation, cell phone art, fashion, sculpture, anime, films, elaborate graphics, popular action figurines and models, electronic music, and sound and light installations,” the gallery promised, billing it as “the largest exhibition of Japanese pop culture creators ever assembled outside of Japan.” Exhibitors included Groovisions, a design group most famous for dreaming up a nationally ambiguous cartoon girl named Chappie, and an electronic music and design collective called Delaware. Global Japan had achieved the New York scene’s seal of approval.

There is much more to Japan than the national cool of Buzz Club. Most foreigners will never penetrate the barriers of language and culture well enough to see Japan as the average Japanese sees it. But that is part of Japan’s secret to thriving amidst globalization. There exists a Japan for Japanese and a Japan for the rest of the world. Often, in the case of youth fads, for instance, there is a good deal of overlap. Sometimes, in the case of sumo or the layout of a typical suburban house or the variety shows that proliferate across Japanese television networks, there is none.

More than 60 years ago, in a classic study called Mirror, Sword, and Jewel, a German economist at Tokyo Imperial University named Kurt Singer discussed the contrast between the “plasticity” and “endurance” of Japanese culture, the ability to absorb and adapt foreign influences while still retaining an intact cultural core. Yet for Singer writing in the 1930s, the question was “why this gifted and active nation has produced so little that has been found acceptable by other countries in an age open to all foreign influences.”

Today, Japan has outgrown that question, thanks largely to the qualities of Japanese culture that Singer himself identified. In fact, in cultural terms at least, Japan has become one of a handful of perfect globalization nations (along with the United States). It has succeeded not only in balancing a flexible, absorptive, crowd-pleasing, shared culture with a more private, domestic one but also in taking advantage of that balance to build an increasingly powerful global commercial force. In other words, Japan’s growing cultural presence has created a mighty engine of national cool.

It is impossible to measure national cool. National cool is a kind of “soft power”—a term Harvard dean Joseph S. Nye Jr. coined more than a decade ago to explain the nontraditional ways a country can influence another country’s wants, or its public’s values. And soft power doesn’t quantify neatly. How much of modern American hegemony is due to the ideological high ground of its democracy, for instance, how much to its big corporate franchises, to Hollywood, to rock music and blue jeans, or to its ability to fascinate as well as intimidate? National cool is an idea, a reminder that commercial trends and products, and a country’s knack for spawning them, can serve political and economic ends. As Nye argued in this magazine more than a decade ago, “There is an element of triviality and fad in popular behavior, but it is also true that a country that stands astride popular channels of communication has more opportunities to get its messages across and to affect the preferences of others.”

However, while Japan sits on that formidable reserve of soft power, it has few means to tap it. National cool ought to help Japan infuse its universities, research labs, companies, and arts with foreign talent. But in a vast public opinion study conducted throughout Asia in the late 1990s, respondents who admired Japanese culture and Japanese consumer products thought little of the idea of studying or working in Japan, even less of moving there for good. And as open as Japanese culture is to foreign influences, there is neither political nor public support in Japan for immigration, or for immigrants.

When Nye first wrote about soft power, he rightly believed that Japan’s insularity kept it from taking advantage of its formidable economic soft power. Today, a decade of globalization has made Japan somewhat less inward looking, but a decade of recession and political turmoil has made many Japanese seem less secure in some of their fundamental values, undermining traditional ideas in everything from business culture to family life. Those values may rebound with the economy, or they may transform into something new—a national uncertainty infused with even more anxiety by the demographic changes that will accompany the graying of Japan’s population.

Japan’s history of remarkable revivals suggests that the outcome of that transformation is more likely to be rebirth than ruin. Standing astride channels of communication, Japan already possesses a vast reserve of potential soft power. And with the cultural reach of a superpower already in place, it’s hard to imagine that Japan will be content to remain so much medium and so little message.